10-year TIPS auction Monday, Jan 11
Thursday, January 7th, 2010
Categorized as: Yesterday's News (old post archive)
The Treasury announced today it will offer $10 billion in 10-year TIPS at auction on Monday, January 11. Like Series I Savings Bonds, TIPS are a Treasury-issued inflation-protected security. Among their many differences, TIPS typically have a higher base interest rate than I bonds. Experienced I bond investors may be interested in this auction.
To purchase TIPS at the auction, log on to your TreasuryDirect account and place an order before the day of the auction. TIPS are available in $100 increments.
As a TreasuryDirect investor, you won’t actually place an auction bid. Large financial institutions do that outside of TreasuryDirect. However, you will receive the amount of TIPS you order at the highest interest rate determined in the auction. The actual price, yield, and rate of the investment won’t be known until after the auction.
As of yesterday, the Treasury calculated the 10-year yield of outstanding TIPS at 1.48%. Daily Treasury Real Yield Curve Rates is a web page the Treasury updates daily with current calculated yields for specific TIPS terms.
This compares to the current I bond fixed rate of 0.3%. However, note that there are other differences between TIPS and I bonds other than the rate.